Likelihood of confusion of pharmaceutical trademarks in Hungary

Recently the Hungarian Supreme Court delivered the final judgement on a Hungarian trademark application opposed by a pharmaceutical company. The opposition was based on the pharmaceutical company’s earlier trademarks. The case went through all levels of the trademark opposition system. The decisions in this matter highlight interesting aspects of pharmaceutical trademarks.

In 2006 a Hungarian company applied for the Hungarian word mark VENETON for medicinal products and similar goods in class 5. Novartis opposed the trademark application based on its earlier trademarks VENOTON and VENORUTON, both registered internationally for pharmaceutical products in class 5.

The Hungarian Patent Office (now Hungarian Intellectual Property Office or HIPO) rejected the opposition and decided to register the mark VENETON. The reason for this somewhat surprising decision was that, according to HIPO, Novartis failed to prove genuine use in connection with the earlier trademarks referred to in the opposition. HIPO found that Novartis did not submit any evidence regarding the VENOTON trademark, and that the evidence concerning VENORUTON was not sufficient to meet the requirement of genuine use. Therefore, HIPO did not analyse whether likelihood of confusion between the mark applied for and the earlier registered trademarks existed, and simply rejected the opposition.

Novartis submitted an appeal against the decision to the Metropolitan Court (Budapest) and claimed inter alia that HIPO failed to consider the fact that the applicant did not contest the evidence provided by Novartis regarding the genuine use of the trademark VENORUTON. In fact, the applicant had argued that the packaging of their medicinal product would not be confused with the packaging of Novartis’ products. Hence, according to Novartis, the applicant admitted that the trademark VENORUTON was used as required by the Hungarian Trademark Act. The Metropolitan Court accepted this argument and therefore examined the likelihood of confusion between the mark applied for, VENETON, and Novartis’ earlier trademark, VENORUTON. Firstly, the court stressed that it is the registered form of the trademark and the form of the mark as applied for that have to be compared when considering likelihood of confusion; it is not the form in which they are actually used. Therefore, differences of packaging and therapeutic indications are not relevant for the purpose of examining the likelihood of confusion. Despite this the court found that there is no likelihood of confusion and that the mark applied for could be registered. The court argued that while the first and last three characters are identical, the difference in the middle of the words VENETON and VENORUTON would ensure that there would be no confusion by the relevant public. Furthermore the earlier trademark is a longer word than the mark applied for. As to the conceptual aspects the court stressed that the prefix “VEN” refers to the Latin word for vein, while the suffix “TON” suggests that the product has a tonic effect. Since these elements are often used in similar medicinal products, the visual, phonetic and other differences between the earlier trademark and the marks applied for are significant.

Novartis appealed against the decision of the court of first instance, and the Metropolitan Appeal Court (Budapest) allowed the appeal as they considered that there was likelihood of confusion between VENETON and VENORUTON. The overlap of goods was a significant factor, as was the fact that in the Hungarian language the accent is on the first syllable of a word, in this case on the prefix “VEN”. The court felt that the difference in the middle of the words is not as significant as it was held by the first instance court. The appeal court also referred to European caselaw, namely Lloyd Schuhfabrik Meyer & Co. GmbH vs. Klijsen Handel BV (C-342/97). They emphasized that “the average consumer only rarely has the chance to make a direct comparison between the different marks but must place his trust in the imperfect picture of them that he has kept in his mind”. Therefore, bearing in mind that the mark and the earlier trademarks concern the same type of goods, they felt that there was a significant risk that the consumer would falsely perceive goods bearing the mark VENETON as originating from Novartis. The appeal court also stressed that the meaning of the prefix and suffix would not ensure that an average consumer, even one familiar with the Latin language, would focus on the difference in the middle of the words. Furthermore, in the field of medicinal products the requirement of distinction of different products is of utmost importance. It is, therefore, also important that the products are intended for the same group of consumers.

The applicant filed an extraordinary appeal against the final decision with the Hungarian Supreme Court and requested to set aside the second instance judgment and confirm the earlier decisions. The Supreme Court rejected the appeal and confirmed the second instance judgment. The court agreed with the appeal court in terms of the existence of the likelihood of confusion. According to the final decision the average consumer does not analyze the meaning of Latin word elements and he does not remember marks by their meaning. Furthermore, according to the Supreme Court, the fact that one product requires prescription while the other is an over the counter product does not eliminate the likelihood of confusion. In this regard the court also stressed that in the latter event confusion may also arise later on. The Supreme Court also found that the therapeutic effect of medicinal products is not of utmost importance in terms of analyzing the likelihood of confusion. Finally the court confirmed that the appeal court was correct when it stated that in the field of medicinal products unambiguous distinction between products names, and therefore between trademarks, is very important.